“I’ll build a factory, cut 900 billion won in taxes” Samsung’s US investment push

Samsung’s Austin semiconductor plant operated by Samsung Electronics in Texas, USA. It employs over 3,000 people, and recorded sales of 2.1 trillion won in the first half of last year. [사진 삼성전자]

It is analyzed that if Samsung Electronics builds a semiconductor foundry (consignment production) plant in the US, it could have an economic ripple effect of 10 trillion won in local communities. While major foreign media reported that Samsung Electronics is searching for a new semiconductor factory site worth $17 billion (about 19 trillion won), industry analysts say that Samsung Electronics’ final decision has entered a’countdown’.

Samsung Electronics recently submitted a letter of intent for investment to the Texas State Treasury Department, according to media in Texas on the 7th and foreign media such as Reuters. Samsung Electronics has been operating a foundry plant in Austin, Texas since 1998. In October of last year, it was observed that Samsung Electronics would build an additional factory by purchasing the site near the Austin factory.

Graphic image of world foundry semiconductor market share. [자료제공=트렌드포스]

Samsung Electronics has attached a report on economic ripple effects analyzed by the local consulting company Impact Data Source to the letter of intent. According to the report, of Samsung Electronics’ total investment of $17 billion, $5.69 billion (approximately 6 trillion won) was used to purchase factories and sites, and $9.93 billion (approximately 11 trillion won) to purchase related facilities and equipment. do. Among them, in the process of constructing the factory, it is expected that $4,55 billion (about 4.5 trillion won) will flow into the sales of local communities such as construction companies and planners. In addition, considering indirect effects such as distribution, logistics, and consumption, it is estimated that a total of 8.9 billion dollars (approximately 10 trillion won) of economic ripple effects will occur to the local community only by factory construction. In addition, it is calculated that 10,9873 jobs will be created in the construction process, and about 4.6 billion dollars (about 5.2 trillion won) will be paid to them.

The report predicted that if the Austin semiconductor plant is expanded and operated, a total of 8.6 billion dollars (about 9.7 trillion won) will be generated directly and indirectly over the next 20 years through employment and tax revenue. It is estimated that there are 2973 full-time jobs, which will be paid 7.3 billion dollars (8.2 trillion won). Through this, the city of Austin analyzed that it would generate a net profit of 1.2 billion dollars (1.3 trillion won) over 20 years due to various taxes and consumption inducing effects.

Reuters reported that if Samsung Electronics builds a new plant in Austin, it plans to start construction in the second quarter of this year and operate the plant in the third quarter of 2023. To this end, Samsung Electronics requested the Texas government to reduce taxes of $85.5 million (about 900 billion won) over the next 20 years.

In the document, Samsung Electronics stated that it will carry out the project in Arizona and New York, the US, and in Korea (Pyeongtaek and Yongin, Gyeonggi-do, etc.), where Samsung’s headquarters are located, if there is no improvement for high taxes in Texas. Since they are receiving love calls from rival cities, they are’tug of war’ asking for more attractive incentives. Samsung Electronics said, “We are reviewing multiple candidate sites and have not yet decided.”

However, the industry interprets that “Samsung’s US semiconductor investment has entered the countdown.” On the 28th of last month, Choi Yun-ho, head of Samsung Electronics’ management support department (president), announced his business results and said, “We will pursue meaningful mergers and acquisitions (M&A) and expansion of facility investment by 2023.” In April 2019, Samsung Electronics announced’Semiconductor Vision 2030′, “We will invest 133 trillion won newly by 2030 and hire 15,000 professional personnel to achieve the world’s No. 1 in system semiconductors.”

Reporter Kim Kyung-jin [email protected]